Food for Thought No. 2
This week we reflect on living in an attention scarce economy, market based attention allocation failures, normalcy bias, and using first principles in our thinking.
Hi,
Here is your weekly GC Food for Thought newsletter - curated insights to help you thrive in a world grappling with uncertainty and exponential change.
Every Sunday morning this summer, you'll receive GC's 3-2-1 newsletter with 3 ideas to explore, 2 things to read, and one question for you.
Gamechanger Sessions No. 3
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Albert Wenger, Managing Partner at Union Square Ventures, shared profound insights with us.
Albert discusses that we're currently experiencing a seismic shift from the Industrial Age to the Knowledge Age: the rise of digital technologies driving the shift from scarcity of capital to scarcity of attention. He rightly points out that it is paramount that we get this transition right to avoid massive turmoil and upheaval that has been present in previous shifts of this magnitude.
So, why does our attention deficit matter?
In Albert's words, "attention is our most basic need, the existential need to make sense of the world as an individual by finding a purpose that makes our life meaningful."
We are bombarded, daily, with an endless stream of information - much of which is just transient noise. Our attention deficit is preventing us from tackling species-level threats to humans such as climate change, and pandemics like this one.
Or, if you're on a time crunch, watch the key session theme clips or read GC’s deep dive insights.
Albert has written an exceptional book on the transition from the Industrial Age to the Knowledge Age. World After Capital is a must read, available for free and well worth your attention.
EXPLORE
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I. Market-based attention allocation failures.
What should we be paying attention to that the market doesn’t reward?
Personally - we often over-allocate attention to our professional lives and under-allocate to things like finding our purpose in life
Collectively - the market teaches us to allocate using price signals, yet price signals don't exist for more important things or are incredibly delayed (ie, there is no price for having enough PPE or working on a vaccine not yet needed)
We've become overly reliant on the market for attention allocation. Instead, we should take time to pause, reflect, and reset. Some things don't have, and will never have price signals.
Also, the allocation of attention cannot and therefore should not take place on the basis of near term measurement. Markets are good for the multi-year measurement problem of capital but terrible for the much longer timescale one of attention.
- Albert on resetting our priorities, individually and as a society and on the need for multi-year measurement of our attention.
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II. Normalcy bias - a cognitive bias that things will stay the same. It blinded our foresight for COVID19.
“The tendency to see the current state of the world as the normal that will not change is sometimes called “normalcy bias.” This is fundamentally about the difference between a static and a dynamic conception of the world. Entrepreneurs and startups investors have that dynamic conception that change is possible and even more that they can bring about that change.”
Many people have referred to this pandemic as a 'black swan' event (term coined by Nassim Taleb meaning that is was not predictable). However, it's apparent now that this should have been no surprise. In fact Nassim Taleb argues that this is more of a 'white swan' event we should have seen coming.
- Albert on normalcy bias and our dynamic world.
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III. First Principles - Learning to ignore generic advice and focusing on incontrovertible truths.
In a world where everyone is shouting generic advice loudly, be wary of its application to your business and life. Rather, look at the world from a first principles perspective - incontrovertible “truths” that are hard to dispute.
- Albert on how to use first principles in business.
“A first principle is a foundational proposition or assumption that stands alone. We cannot deduce first principles from any other proposition or assumption.”
- Farnam Street on First Principles.
READ
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I. On transitioning to the knowledge loop and getting un-stuck from the job loop.
It's so easy to get wrapped up in work - Albert puts it as the perpetual job loop, where individuals sell labour to buy more stuff (the product of other's labour).
The problem is that humans are not made purely for labour - we should be spending more time in the knowledge loop, central to our survival as a species.
The knowledge loop allows individuals to learn, create, and share at zero marginal cost. However, if individuals lack economic, informational, or psychological freedom, it becomes difficult to access, contribute to, or share in the knowledge loop.
- Albert on the knowledge loop in his book: World After Capital.
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II. Three freedoms to focus on for a peaceful transition from the Industrial Age to the Knowledge Age.
Economic freedom. We must let everyone meet their basic needs without being forced into the Job Loop.
Informational freedom. We must remove barriers from the Digital Knowledge Loop that artificially limit learning from existing knowledge, creating new knowledge based on what we learn and sharing this new knowledge.
Psychological freedom. We must free ourselves from scarcity thinking and its associated fears and other emotional reactions that impede our participation in the Digital Knowledge Loop.
- Albert on Enhancing Freedoms to peacefully transition to the Knowledge Age in his book: World After Capital.
REFLECT
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We live in a state of information overload. We are inundated with information constantly. Our attention is scarce. The categorical mistake that we must avoid is to equate information and “busy-ness” with knowledge and wisdom.
In a world starved of attention, yet overwhelmed by information, where are you prioritizing your attention?
Thanks for reading. Happy August!
See you next weekend.
Best,
Candice
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P.S. You can watch all previous Gamechanger sessions and see highlights on our website. We'll land in your inbox 1x a week. No spam, we promise.
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